Agenda item

Medium Term Financial Plan 2022/23 to 2024/25 and Capital Programme

Decision:

Cabinet received a report on the 3-year revenue budget for 2022/23 to 2024/25 and 4-year capital programme for Buckinghamshire Council covering the period to 2025/26. These proposals were based on the latest known funding position, service budget pressures and the key financial risks facing the Council both now and in the future. They also took account of the findings from the recent budget scrutiny inquiry.

The Council Tax Resolution report would be presented as a separate report as part of the budget to Council in February and would contain the final information from the other precepting authorities leading to the total Council Tax for the area, which Full Council would be required to approve.

The report included Special Expenses that were particular costs specific to an area not covered by a local town or parish council (e.g. recreational grounds, allotments, community centres markets etc.) There were three special expense areas within the overall Council area; High Wycombe Town Committee, West Wycombe Church Yard and Aylesbury Town. The proposed budgets and precepts were presented in Appendix 5.

Although the current Government’s 3-year Spending Review covered a 3-year period, the Local Government Settlement announcements were only for 2022/23. This reflected the significant changes that were planned to Local Government funding for 2023/24. These changes would not impact the quantum of funding available to Local Government, but rather the mechanism (the Fair Funding Review) and policy objectives (Levelling Up) to be funded through the previously announced funding envelope.

Whilst recognising the ongoing impact of Covid-19 on Local Authorities the provisional settlement did not include any specific funding for the ongoing impacts of the pandemic. Given the current Government approach of one-off interventions when circumstances required national policy intervention it was likely that if impacts increased in future years then specific one-off funding would be announced alongside any response measures.

RESOLVED –

That Council be recommended to:

(1) Approve the Revenue Budget and Capital Programme (Appendices 1-3).

(2) Approve the ‘Special Expenses’ budgets, precepts and associated services for Aylesbury Town, High Wycombe Town and West Wycombe Church Yard (Appendices 5 & 6).

(3) Support the proposal to delegate to Cabinet decisions to add up to £100m to the Capital Programme, to be funded by Prudential Borrowing, subject to a robust business case being approved.

(4) Approve the Council Tax Reduction Scheme Policy (Appendix 7).

(5) Delegate authority to the Leader, in consultation with the s.151 Officer, to make any technical changes to the Council Tax Reduction Scheme as required from legislation concerning the £150 Council Tax Energy Rebate Scheme, together with any changes required to implement any new discretionary schemes linked to the discretionary funding allocated.

(6) Approve the Schedule of Fees & Charges as set out in Appendix 8.

(7) Note that a supplementary report, the formal Council Tax Resolution, will accompany the final budget to full Council.

Minutes:

Although the current Government’s Spending Review covered a 3-year period, the Local Government Settlement announcements were only from 2022/23. This reflected the significant changes that were planned to Local Government funding from 2023/24. These changes would not impact the quantum of funding available to Local Government, but rather the mechanism (the Fair Funding Review) and policy objectives (Levelling Up) to be funded through the previously announced funding envelope.

The Leader made the following points in presenting the budget:-

· The Council had been working to provide services whilst dealing with the pandemic for the past two years and this had produced a significant impact on the Council’s income e.g. car parking (£1.2 million a month pre-pandemic), leisure centres, commercial and rental investments. It was uncertain whether these levels of income which helped support frontline services, would ever return to historical levels.

· Uncertainty around Government funding which was only for one year although the Council had undertaken a three-year budgeting process for the revenue budget in line with the timeframes of the government’s Spending Review announced in October 2021. Reference was made to the Levelling up agenda where priority had been given to the Midlands and the North of England and the Fair Funding Review currently being undertaken.

· Significant upturn in demand for Council Services, particularly increases in social care costs following Covid, significant additional referrals for children and also adults, with increasingly complex cases. Protecting the vulnerable remained a key priority for the Council.

· There was a weakened provider market for those who provided domiciliary services or care homes for short or long term care. This market had been de-stabilised with the impact of Covid. There was a demand for higher care fees from providers, some of whom may be economically fragile which would again impact on the Council to ensure that the vulnerable were looked after.

· There were various contingencies and reserves to mitigate all the impacts and risks outlined above.

· The business environment was uncertain and with the funding from business rates the Council were aware of the pressures of the local economy due to the levels of inflation, shortages of staff, uncertainty around the retail industry and the move to online shopping.

· The Government had now commented that the Country needed to live with Covid and that future variants could be possibly more mild but more virulent and transmissible. The Council needed to be cautious about returning to normal when there was uncertainty about future variants.

· Whilst it was important to provide Home to School Transport, particularly for children with Special Educational Needs, it was a substantial cost to the Council and this needed to be kept under review.

· The Council also recognised the pressure on resident’s finances with rising petrol and energy prices, cost of living increases with supermarkets and the need to provide value for money for residents.

· The Council would focus on protecting the vulnerable and residents’ priorities such as roads and pavements with a £100 million budget over 4 years to improve this network. There was concern that the Government could significantly reduce funding on roads however, the Council was committed to maintaining this level of spending on the road and pavement network. There was also a focus on clearing drain and gullies in the County and an additional £400,000 to clear litter, particularly focusing on the County’s major A roads to take place imminently.

· Additional funding had been found to support the warden scheme in High Wycombe to help support community safety.

· The budget had been funded through efficiencies/additional income (£43.7 million) and reluctantly an increase in Council Tax. This had fallen into two parts; the increase for general services as inflation was running at 5% which required an increase in Council tax of 1.99%. Secondly the increase in social care, where the Government was looking to increase National Insurance contributions by 1.25% but in the first three years of this the money would go mainly to the National Health Service to cope with the backlog particularly during Covid (currently £6 million likely to rise to £9 million). Therefore, the Government were expecting the Council to raise an extra precept for social care. This equated to a further 2% so 3.99% in total for the Council, alongside precepts from parishes, the police and fire authorities.

· There was a capital programme of £524 million over 4 years to provide some certainty for projects and to provide infrastructure such as link roads around Aylesbury, infrastructure around Princes Risborough and High Wycombe. The Council continued to lobby the Government to increase funding for road repairs.

During discussion the following points were made:

· A Cabinet Member reported that this was a carefully crafted and prioritised budget prepared in difficult financial times for resident’s needs. These were difficult post covid recovery times and many Councils in similar areas had not managed to present a balanced budget. Some other Councils were in debt but this Council continued to be cautious.

· The Cabinet Member for Health and Wellbeing referred to the Adult Social Care budget of £164 million and the importance of levying the 2% increase in Council tax; there was huge uncertainty for adults and children with an increasing elderly population and people with complex needs which impacted on the cost of nursing care. The provider market was not stable currently which was a national issue. Contingencies were required to deal with any unexpected crisis in this area which included the impact of the Government’s White Paper Putting People at the Heart of Care and enabling self funders to access council rates of care of which there were over 60% in Buckinghamshire. The potential equalisation of the care market was a big financial risk for Councils. Other areas within the portfolio included adults with learning disabilities of which there were higher than average numbers in Buckinghamshire and people with physical disabilities.

· The Finance and Resources portfolio was committed to delivering an £11million net budget reduction over the next three years which was 20% of their budget. There were challenging targets in income streams and delivering efficiencies in back office services. Income generation would be through the Council’s land and property assets and savings through staffing efficiencies, contract harmonisation such as the IT network contract and also the plans for property rationalisation and the downsizing of office space. Reference was made to using general fund reserves (of which the Council had £47 million) to cover a deficit in the second year of £1.4 million. In terms of the capital budget the Cabinet Member welcomed the new Household Waste Recycling Centre in Buckingham as it had been recognised existing facilities were inadequate.

· In terms of transport, a Cabinet Member particularly made reference to funding into Active Travel Schemes over the 4 year period which cost £4.6 million eg Emerald Way connecting to Haydon Hill cycle path, the Green Wheels in Motion COP event to provide a Green Way throughout the County. It was important to also allocate funding to mitigate the impact of HS2 and East/West Rail. The Council was being cautious currently about parking income. The Home to School Transport Team had made £3 million efficiencies through their re-procurement but the Council still had to fulfil their statutory duties.

· The Cabinet Member for Communities reported that they were looking for efficiency savings through undertaking a voluntary grants review through a commissioning approach and reducing the funding to Community Board which should help them to focus funding on projects that added value to the community and produced outcomes. A Task and Finish Group had been set up to reset and streamline the process. The Service were looking at devolving special expenses in Aylesbury by devolving the Community Centres and playing fields. In High Wycombe similar facilities were run by the Town Committee.

· The Schools budget was large but most of the funding came from DSG (£532 million). The spend for the 100,000 children in Buckinghamshire was £4,265 per child for primary schools and £5,525 per pupil for secondary schools.

The Finance Team were congratulated on their work on the balanced prudent budget.